Strata SM REIT Registration Cancelled – SEBI Caution

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  • Last Updated on 15 May, 2025

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Strata SM REIT

PR No.25/2025, Dated: 14.05.2025

1. Introduction

On 14 May 2025, the Securities and Exchange Board of India (SEBI) issued a cautionary press release announcing that it has accepted the voluntary surrender of registration by Strata SM REIT, a Small & Medium Real Estate Investment Trust registered earlier this year. The decision follows SEBI’s review of adverse news reports and ongoing legal proceedings involving the REIT’s promoter, as well as discussions with the trustee, an independent director, and senior compliance personnel.

2. Background – What Is an SM REIT and Who Is Strata?

Small & Medium Real Estate Investment Trusts (SM REITs) allow fractional ownership of real-estate assets, enabling smaller ticket-size investors to participate in property investments. Strata, a Bengaluru-based fractional-ownership platform, secured SM REIT registration in January 2025 with plans to launch multiple schemes in FY 2025-26. However, an FIR and related civil proceedings against one of its promoters cast doubt on the entity’s regulatory fitness.

3. Key Points from SEBI’s Circular

Issue SEBI’s Position Practical Effect
Surrender of Registration Strata’s application to surrender its SM REIT certificate is accepted. The entity loses its status as a SEBI-regulated intermediary.
Representation Strata must not hold out or represent itself as a SEBI-registered SM REIT going forward. All marketing material must drop regulatory references immediately.
Schemes Launched None to date. Strata had not launched or collected funds for any SM REIT scheme. No need for scheme-level wind-down; investor monies were never raised.
Investor Advisory SEBI advises investors to exercise caution when dealing with Strata or any related offerings. Investors should verify regulatory status before committing funds.

4. Recommended Actions for Investors

  1. Check SEBI’s Intermediary Database to confirm current registration status before making commitments.
  2. Request Written Disclosures from Strata on how the surrender impacts existing or proposed deals.
  3. Consult Independent Advisors for legal and financial due-diligence before participating in any new offerings.

5. Conclusion

SEBI’s acceptance of Strata SM REIT’s surrender serves as a reminder that regulatory status can change quickly when promoter integrity is in question. Because no schemes were launched, investor funds are not directly at risk under the SM REIT framework; nevertheless, heightened caution is advisable when engaging with Strata or similar fractional-ownership propositions until complete clarity emerges.

Click Here To Read The Full Press Release

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied